Summary of Work: Our previous studies of ion channel regulation by signal transduction pathways in rat pituitary tumor cells (ES 80043-09) have identified a novel signaling pathway for potassium channel (Bkca) stimulation through protein dephosphorylation by somatostatin receptors coupled to pertussis toxin-sensitive GTP-binding proteins. We have investigated the molecular events linking G-protein activation to stimulation of protein phosphatases (PP). Dr. Duerson demonstrated that somatostatin action is blocked by drugs that interfere with arachidonic acid release by phospholipase A2 and metabolism by lipoxygenases. In contrast, higher concentrations of the same drugs had no effect on BK channel gating in cell-free patches, on the G-protein-dependent inhibition of adenylyl cyclase by somatostatin, or on the stimulation of BK channels by protein dephosphorylation through a distinct cGMP- dependent pathway we described earlier. Exogenous arachidonic acid stimulated BK channel activity as effectively as somatostatin and was also blocked by inhibitors of lipoxygenases and protein phosphatases. Dr. Duerson also demonstrated that this pathway could be reconstituted in cell-free patches of membrane using GTPgS or arachidonic acid, which proves that membrane-delimited pathways for ion channel regulation need not involve direct G-protein binding to the channel. In collaboration with Dr. Rossie and her colleagues who purified an arachidonic acid stimulated protein phosphatase activity from the GH cells, we have cloned and identified this enzyme as PP5. When GH cells are transfected with a truncated PP5 regulatory domain, inhibition of excitability by somatostatin is disrupted, but when PP5 is mutated to reduce its sensitivity to phosphatase inhibitors, somatostatin signaling can be rescued in the presence of okadaic acid. These results strongly support a direct role for PP5 in somatostatin signalling through arachidonic acid.